Medical therapies provide substantial benefits to patients, including those measured in clinical trials. However, a new economic study finds that indirect benefits including increased productivity and "peace of mind" for the population at risk of disease create substantial value for treated and non-treated patients alike yet are often not measured in US value assessments.

LOS ANGELES, Nov. 10, 2016 /PRNewswire/ -- As the US healthcare system increasingly moves toward reimbursement based on value, rather than volume of care, a growing movement toward systematic value assessment is taking shape. Traditional cost-effectiveness studies focus on cost relative to clinical benefits, but there is mounting evidence that health technologies can provide substantial value outside of direct clinical benefits. Often, these non-clinical benefits are very important.

A new study demonstrates that non-clinical benefits including productivity and "peace of mind" provide value to society for chronic progressive diseases like multiple sclerosis (MS), a debilitating neurological disease in which patients experience fatigue, pain, and mobility and sensory problems. Though no cure for MS currently exists, a number of therapies are available to help manage the symptoms and slow the disease's progression. The study, recently published in the American Journal of Managed Care, finds that, for healthy individuals without MS, the knowledge that MS therapies are available provides significant value.

The broader perspective of consumers matters. The cost of covering MS drugs is borne primarily by consumers who do not have MS, but pay insurance premiums and taxes that finance coverage. However, all healthcare consumers also benefit from MS treatments that reduce direct medical costs (e.g., for hospitalizations), increase workplace productivity and income, and provide "peace of mind" for the population at risk of MS because there is technology available to slow or delay its progression. When decisions about health insurance coverage policies are based on value, this has important implications for beneficiaries who are paying for insurance. Past estimates of treatment value only accounted for the direct medical benefits generated for sick individuals. This approach has ignored the indirect benefits for patients and the overall benefits for healthy individuals, and may have underestimated MS therapies' value to society, according to the authors.

"The real question in healthcare is whether members of society are getting what they pay for. Our study suggests that, from the perspective of the entire population, MS drugs are much more valuable than previously thought," said lead author Dr. Tiffany Shih, Research Economist at Precision Health Economics.

The study's approach is based on the notion that medical technology provides broader benefits, including those to healthy individuals by ensuring that if they become sick in the future, treatments will be available to ease the burden of disease. The authors used validated economic models to quantify the value to both the sick and the healthy of three therapies for MS for two scenarios. In the first, the authors assumed that the sick pay the full cost of treatment cost. In the second scenario, all individuals are covered under actuarially fair health insurance.

In the first scenario, the authors estimated that those with MS gained $11.1 billion in value from the three therapies over the time period of the study, while the value to healthy individuals was $8.9 billion—a combined consumer value of $20.0 billion. When health insurance was assumed to be available, however, the total value to sick and healthy grew to $46.2 billion. The study's results suggest that society benefits when costs are shared across the insurance pool, and value estimates that ignore the role of insurance may undervalue technology. Additionally, the authors found that the "peace of mind" value to the healthy is largest for highly severe diseases like MS.

Financial support for the study was provided by the Massachusetts-based pharmaceutical company Biogen, Inc.

About Precision Health Economics PHE integrates deep technical expertise with practical insights to bring intellectual integrity, academic rigor, and a creative approach to the most challenging problems in healthcare. In addition to its world-renowned team of health economists, PHE draws on the expertise of a network of affiliated academic scientists and clinicians from the world's leading universities, straddling the policy and clinical arenas to reach top decision makers and influence outcomes. The company has offices in Austin, TX; Boston, Mass.; Los Angeles, San Francisco, and Oakland, Calif; and Vancouver, BC. For more information, visit www.precisionhealtheconomics.com.